For more information about Vanguard funds or Vanguard ETFs, visit advisors.vanguard.com or call 800-997-2798 to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information are contained in the prospectus; read and consider it carefully before investing.

Vanguard ETF Shares are not redeemable with the issuing Fund other than in very large aggregations worth millions of dollars. Instead, investors must buy and sell Vanguard ETF Shares in the secondary market and hold those shares in a brokerage account. In doing so, the investor may incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling.

Investments in bond funds are subject to interest rate, credit, and inflation risk.

Diversification does not ensure a profit or protect against a loss.

Investments in stocks or bonds issued by non-U.S. companies are subject to risks including country/regional risk and currency risk.

All investing is subject to risk, including possible loss of principal.

As an advisor, you likely manage your clients’ investment portfolios according to your own set of investment principles. In doing so, you’re bound to run into clients or prospective clients whose ideas conflict with your beliefs about investing and what’s in their best interests. For instance, you may disagree when a client says something along the lines of:

Acknowledge what your clients are saying and the positive merits of their suggestions.

Talk over the agreed-upon goals they are trying to achieve, and explain how this course of action could affect their progress toward those goals.

Discuss the suitability of any product or strategy suggested by clients.

Address any needs to evaluate and adjust policy statements.

Seek to uncover and address any unspoken client interests or concerns.

If the impetus for the conversations are issues you and your clients have discussed—perhaps market volatility—you may have a great opportunity to revisit and reaffirm your plan. Explain that impulses to deviate from plans inevitably arise at the worst possible times and that you will stand firm for their benefit.

In extreme cases–it may be best to part ways

Understandably, no one likes to lose business. However, if you cannot reconcile your views with those of the occasional client or prospect, the proper conclusion may be that he or she is simply unsuitable for your practice. In such a case, I would suggest having an honest conversation about why you believe the relationship may not be a good fit. Be respectful and diplomatic, and hopefully the client or prospect will respect you for sticking to your principles. From time to time, such a conversation might preserve a relationship.

Ultimately, building your practice around clients who best align with your philosophy will save you a tremendous amount of time trying to persuade the “dissenters”—time that may be better spent deepening your relationships with existing clients or developing relationships with prospective clients.

Note: All investing is subject to risk, including possible loss of principal.

Chris Tidmore

Chris Tidmore, CFA, is a senior investment strategist in Vanguard Investment Strategy Group. Before joining Vanguard in August 2015, Mr. Tidmore was the managing partner of Butcher's Hill Capital, LLC, which managed the Geneva Arbitrage Fund. The Geneva Arbitrage Fund employed both merger arbitrage and event-driven investment strategies. Before the launch of the Geneva Arbitrage Fund, Mr. Tidmore worked as an arbitrage trader, analyst, and portfolio manager for a family-owned holding company. In addition, he was an options trader on the American Stock Exchange. Before his work in the securities industry, he was employed as an auditor, providing audit, accounting, and consulting services to various charitable and governmental organizations. Mr. Tidmore has developed and taught courses in financial accounting, financial statement analysis, asset valuation, equity derivatives, trading, portfolio management, alternative investments, and CFA® and CPA review courses for an extensive list of clients. He also has lectured on various accounting and finance topics to both the CFA Institute and the CFA Society of Philadelphia. Mr. Tidmore earned a B.S. in accounting at the University of Delaware. He is a CFA charterholder and is a past president of the CFA Society of Philadelphia.

Acton A. | August 7, 2016 4:35 am

Portfolio investment is a hands-off or passive investment of securities in a portfolio, and it is made with the expectation of earning a return. This expected return is directly correlated with the investment’s expected risk. Portfolio investments can span a wide range of asset classes such as stocks, government bonds, corporate bonds, Treasury bills, real estate investment trusts (REITs), exchange-traded funds (ETFs), mutual funds and certificates of deposit. Portfolio investments can also include options, derivatives such as warrants and futures, and physical investments such as commodities, real estate, land and timber. Having an investment portfolio in and of itself is not necessarily beneficial. An investor needs to allocate capital in a prudent way in order to reap the benefits of having exposure to the financial markets. By creating a diversified investment portfolio, which is to spread capital across more than just one investment category, investors can reap benefits. Without an investment portfolio, an individual may be unprepared for some of the major milestones in life. Placing money in a bank savings account may protect money, but growth is likely to be highly modest in comparison with the potential profits in the financial markets. By building an investment portfolio that focuses on income securities, an investor can supplement his income for the near term and in the future. https://twitter.com/alangavornik

Vanguard welcomes your feedback on this blog, but please read our
commenting guidelines
first. Comments will be published at our discretion. Questions or comments about your Vanguard
investments or customer-service issues? Please contact us directly. Opinions expressed in blog
comments are those of the persons submitting the comments, and don't necessarily represent the
views of Vanguard or its management.

For more information about Vanguard funds or Vanguard ETFs, visit advisors.vanguard.com or call 800-997-2798 to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information are contained in the prospectus; read and consider it carefully before investing.

Vanguard ETF Shares are not redeemable with the issuing Fund other than in very large aggregations worth millions of dollars. Instead, investors must buy and sell Vanguard ETF Shares in the secondary market and hold those shares in a brokerage account. In doing so, the investor may incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling.

Investments in bond funds are subject to interest rate, credit, and inflation risk.

Diversification does not ensure a profit or protect against a loss.

Investments in stocks or bonds issued by non-U.S. companies are subject to risks including country/regional risk and currency risk.

All investing is subject to risk, including possible loss of principal.

About us

The Vanguard Blog for Advisors™ is an interactive way for you to join in the discussion with some of our top thought leaders as they offer their perspectives on a wide range of topics that affect you as an investment professional.

Keep in mind that our bloggers write from their own viewpoints. Their blog posts are not intended to be official statements made on behalf of Vanguard.